⚠ A Motivated Adversary With Existing RelationshipsModerate threat
Texas Instruments (TXN) — threat to the moat
Those distributors still hold the inventory, the credit terms and the relationships, and now earn a fuller margin on somebody else.
TI took its business away from the distributors, and the distributors now sell against it to the customers TI reaches least well.
More than 80% of revenue was direct in 2025, which took volume out of a channel that spent decades building relationships with exactly the long-tail customers TI now serves through a website.1 Those distributors carry Analog Devices, Infineon, STMicroelectronics, Microchip and the Chinese suppliers, and earn a fuller margin on every one of them.
The result is a motivated adversary with existing relationships in the segment where TI's own coverage is thinnest — the smallest customers, whom a salesperson serves best and a website serves adequately.
The bet has largely worked: more than 100,000 customers with about half of revenue from outside the largest fifty is evidence the tail is being reached.
Where it is untested is a downturn, when a distributor's inventory position and credit terms matter more to a small customer than a catalogue does.
Watch TI's revenue growth against the broader analog market's. Long-tail share loss appears there before it appears anywhere in the segment reporting.
- ReportedMore than 80% of revenue was direct in 2025, which took volume out of a channel that spent decades building relationships with exactly the long-tail customers TI now serves through a website.Texas Instruments Incorporated, Form 10-K for the year ended 31 December 2025 (SEC, CIK 97476) — Item 1, Business. TI's two reportable segments are Analog and Embedded Processing, with remaining activities in Other; operations began in 1930 and it has design, manufacturing or sales operations in more than 30 countries. The product portfolio includes more than 80,000 products. TI states four sustainable competitive advantages: a strong foundation of manufacturing and technology, a broad portfolio of analog and embedded processing products, the reach of its market channels, and the diversity and longevity of its products, markets and customer positions, which in combination it describes as difficult to replicate. An unpackaged chip built on a 300mm wafer costs about 40% less than one built on a 200mm wafer; TI continued qualifying and ramping production at its newest 300mm fabs in Richardson and Sherman, Texas, and Lehi, Utah, supporting external foundry transfers and internal transfers from its legacy 150mm facilities, and expects to maintain sufficient internal capacity to meet the majority of its production needs, offering customers geopolitically dependable capacity. TI sells to over 100,000 customers, with about half of revenue derived from customers outside its largest 50; more than 80% of revenue was direct in 2025, including TI.com. End markets as a percentage of 2025 revenue: industrial 33%, automotive 33%, personal electronics 21%, data centre 9%, communications equipment 3%, and calculators about 1%. About 60% of revenue comes from customers headquartered outside the United States; revenue from end customers headquartered in China represented about 20% of revenue in 2025, while revenue from products shipped into China represented about 50%. The analog and embedded processing markets remain highly fragmented, with significant global competition from dozens of large and small companies including emerging companies, particularly in Asia. The company's stated objective is the growth of free cash flow per share over the long term. — FY2025 · publ. 2026-02-06 · source ↗